How a global IT revamp is fueling Fords turnaround

Stephanie Overby |
Sept. 1, 2010

If financial results are any indication, the One Ford strategy is moving the company in the right direction.

Every Thursday at 7 a.m., Smither heads to a conference room for Mulally's two-and-a-half hour business plan review (BPR). Each direct report delivers a status update on his function's contribution to the turnaround and its performance against corporate profit targets. Some weeks Smither takes five minutes; others he has the floor for half an hour.

The purpose of the BPR is not to highlight success but to provide an accurate picture of the company's progress toward One Ford so it can make course changes if need be. It's fitting that these meetings take place in the "glass house," as Ford's windowed headquarters building is informally known, but this level of openness and accountability is foreign to legacy employees.

To jump start these frank discussions, Mulally insisted that Smither and his fellow executives label each slide they present as green, yellow or red. Initially, the presentations were all green. "There was hesitance to show a yellow or red slide. Historically, that would have been taken as a sign of weakness," says Todd Nissen, a company spokesman. So when Mark Fields, Ford executive vice president and president for the Americas, was the first to brave a red slide, "Alan called him out on it, in a good way," Nissen says.

Those meetings helped Smither figure out the best way to cut IT costs and set expectations about how those reductions would affect the business. Function and business-unit heads participated in figuring out which applications might not need an upgrade and where investments were required to support key business objectives. "It's a very transparent process," says Smither. "Whenever there's an issue, whether it's in IT or another functional skill team, there's almost always a better plan for moving forward when we come out of the discussion."

The executive team helped evaluate both the value and the risk in IT's cost-cutting plan, including deferring PC renewals through hardware redeployment, delaying increases in network bandwidth in some areas, and postponing the renewal of some noncritical applications. BPR participants also helped to confirm the best areas for IT investment.

"That understanding of the business from a functional and global perspective has given us a huge opportunity to drive efficiency and helped us to focus on innovation," says Smither, "which had not historically been the case for Ford IT."

Global I.T. for Global Vehicles

In 1995, Ford's then-chairman and CEO Alex Trotman announced a grand integration plan to "combine the power, resources and reach of a world company." Symbolizing the new world order would be a new world vehicle, a four-door sedan sold in the United States as the Contour and in Europe as the Mondeo. But--as CAR's Cole relays the story--when the resulting vehicles hit cross-continental car lots, the only thing the American and European versions had in common was the cigarette lighter.